Correlation Between El Pollo and Jack In
Can any of the company-specific risk be diversified away by investing in both El Pollo and Jack In at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining El Pollo and Jack In into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between El Pollo Loco and Jack In The, you can compare the effects of market volatilities on El Pollo and Jack In and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in El Pollo with a short position of Jack In. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Pollo and Jack In.
Diversification Opportunities for El Pollo and Jack In
Poor diversification
The 3 months correlation between LOCO and Jack is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding El Pollo Loco and Jack In The in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jack In and El Pollo is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on El Pollo Loco are associated (or correlated) with Jack In. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jack In has no effect on the direction of El Pollo i.e., El Pollo and Jack In go up and down completely randomly.
Pair Corralation between El Pollo and Jack In
Given the investment horizon of 90 days El Pollo Loco is expected to generate 0.63 times more return on investment than Jack In. However, El Pollo Loco is 1.58 times less risky than Jack In. It trades about 0.02 of its potential returns per unit of risk. Jack In The is currently generating about -0.08 per unit of risk. If you would invest 1,086 in El Pollo Loco on November 28, 2024 and sell it today you would earn a total of 45.00 from holding El Pollo Loco or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Pollo Loco vs. Jack In The
Performance |
| Timeline |
| El Pollo Loco |
| Jack In |
El Pollo and Jack In Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Pollo and Jack In
The main advantage of trading using opposite El Pollo and Jack In positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Pollo position performs unexpectedly, Jack In can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jack In will offset losses from the drop in Jack In's long position.| El Pollo vs. FAT Brands | El Pollo vs. Potbelly Co | El Pollo vs. BJs Restaurants | El Pollo vs. One Group Hospitality |
| Jack In vs. Dine Brands Global | Jack In vs. Bloomin Brands | Jack In vs. BJs Restaurants | Jack In vs. The Cheesecake Factory |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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